International Financial Management (2225.YR.005389.1)

General information

Type:	OBL	Curs:	1	Period:	S semester
ECTS Credits:	3 ECTS

Teaching Staff:

Group	Teacher	Department	Language
Year 1	Cristina Sancha Fernández	Operaciones, Innovación y Data Sciences	ENG

In an increasingly globalized world, firms of all sizes now face decisions about how to obtain and deploy resources abroad. Choices about raising capital, making investments, managing risks, making acquisitions and restructuring firms typically involve international considerations.

The objective of the course is to provide students with a deep understanding of financial issues in a global setting. The course aims to help students develop analytical tools that incorporate key international considerations into fundamental financial decisions. This course intends to prepare for students who will be involved in global investment and financing decisions, as multinational company managers, transaction advisors (investment bankers, commercial bankers, or consultants) , or investors (research analysts or fund managers).

Learning objectives:

1. Understanding of the fundamental principles and ways of multinational companies (MNCs);
2. Have the ability to analyze practical international financial affairs;
3. Right understanding of the conceptions of risks; able to get profit in a proper way to avoid or lower the risks.


Competencies developed:

1. Lead the students to understand the ways of operating of a multinational corporation as well as the international market environment, which include international financial market and the political and economic environment in host countries, etc.
2. Foster the students' abilities to digest the knowledge of multinational companies (MNCs) financing cost and the best financing structure and to understand the difference between accounting and tax and get well prepared for the future work practice.
3. Teach students to master the skills of the MNCs to measure and manage the exchange rate risk with the help of foreign currency derivatives markets.

1. Session 1: Overview of International Financial Management, including capital flow, exchange rate determination, international capital markets, and lessons to be learned from financial market crises. Reading: Jeff Madura, IFM, Chapters 1-4, and 6

2. Session 2: International Parity Propositions, Interest rate parity, PPP, Forward rate hypothesis, International Fisher effect; and how monetary policy can influence the exchange markets and corporate financial decisions. Reading: Jeff Madura, IFM, Chapters 7 and 8 1st Assignment.

3. Session 3: International Financial Budgeting, Project valuation in the cross border scenario. International financial management decision in cost of capital, cross border cash flows projections, project valuations. Reading: Jeff Madura, IFM, Chapters 13, 14, and 15

4. Section 4: International project financing, the trade-off between equity versus debt; currency denominations; internal versus external financing. Centralized or decentralized financing. International debt markets, equity market in practice. Reading: Jeff Madura, IFM, Chapters 17, 19, 21 2nd Assignment.

5. Session 5: Managing exchange risk. Foreign exchange forwards and futures. Reading: Jeff Madura, IFM, Chapter 5

6. Session 6: Hedging the exchange risk. Foreign exchange swaps and options. Reading: Jeff Madura, IFM, Chapter 5 3rd Assignment.

7. Session 7: Forecasting exchange rates. Measuring exposure to exchange rate fluctuations. Reading: Jeff Madura, IFM, Chapters 9 and 10

8. Session 8: Managing exposure to transaction and translation. Reading: Jeff Madura, IFM, Chapters 11 and 12 4th Assignment and the optional question for bonus.

This course will include a mix of online-teaching lectures and assignments. Students are expected attend the lectures and finish all the assignments individually.

Textbook:
Jeff Madura, International Financial Management (IMF). 2015.

Other references (optional):
John Hull, Options, Futures, and other Derivatives, 2012.
Reid W. Click and Joshua D. Coval, The Theory and Practice of International Financial Management, 2002.

Group	Teacher	Department
Year 1	Cristina Sancha Fernández	Operaciones, Innovación y Data Sciences